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This is a Bill, not an Act. For current law, see the Acts databases.
2016-2017
The Parliament of the
Commonwealth of Australia
HOUSE OF REPRESENTATIVES
Presented and read a first time
Treasury Laws Amendment (Banking
Measures No. 1) Bill 2017
No. , 2017
(Treasury)
A Bill for an Act to amend the law relating to
banking, insurance, credit, registrable corporations
and financial system regulation, and for related
purposes
No. , 2017
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
i
C
ontents
1
Short title ........................................................................................... 1
2
Commencement ................................................................................. 1
3
Schedules ........................................................................................... 3
Schedule 1--Non-ADI lender rules
4
Banking Act 1959
4
Schedule 2--Registrable corporations
11
Financial Sector (Collection of Data) Act 2001
11
Schedule 3--Restricted words
15
Banking Act 1959
15
Schedule 4--Objects provisions
18
Banking Act 1959
18
Insurance Act 1973
19
Life Insurance Act 1995
19
Schedule 5--Credit card reforms
21
Part 1--When a credit card contract, or a credit limit increase,
is unsuitable
21
National Consumer Credit Protection Act 2009
21
Part 2--Credit limits
24
Division 1--Credit limit increases
24
National Consumer Credit Protection Act 2009
24
Division 2--Credit limit reductions
24
National Consumer Credit Protection Act 2009
24
Part 3--Interest charges
29
National Consumer Credit Protection Act 2009
29
Part 4--Ending credit card contracts
31
National Consumer Credit Protection Act 2009
31
Part 5--Application provisions
35
ii
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
No. , 2017
National Consumer Credit Protection (Transitional and
Consequential Provisions) Act 2009
35
No. , 2017
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
1
A Bill for an Act to amend the law relating to
1
banking, insurance, credit, registrable corporations
2
and financial system regulation, and for related
3
purposes
4
The Parliament of Australia enacts:
5
1 Short title
6
This Act is the Treasury Laws Amendment (Banking Measures
7
No. 1) Act 2017.
8
2 Commencement
9
(1) Each provision of this Act specified in column 1 of the table
10
commences, or is taken to have commenced, in accordance with
11
2
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
No. , 2017
column 2 of the table. Any other statement in column 2 has effect
1
according to its terms.
2
3
Commencement information
Column 1
Column 2
Column 3
Provisions
Commencement
Date/Details
1. Sections 1 to 3
and anything in
this Act not
elsewhere covered
by this table
The day this Act receives the Royal Assent.
2. Schedules 1
and 2
The day this Act receives the Royal Assent.
3. Schedule 3
The day after the end of the period of 2
months beginning on the day this Act
receives the Royal Assent.
4. Schedule 4
The day this Act receives the Royal Assent.
5. Schedule 5,
Part 1
1 January 2019.
1 January 2019
6. Schedule 5,
Part 2, Division 1
1 July 2018.
1 July 2018
7. Schedule 5,
Part 2, Division 2
1 January 2019.
1 January 2019
8. Schedule 5,
Parts 3 and 4
1 January 2019.
1 January 2019
9. Schedule 5,
item 24
1 July 2018.
1 July 2018
10. Schedule 5,
item 25
1 January 2019.
1 January 2019
Note:
This table relates only to the provisions of this Act as originally
4
enacted. It will not be amended to deal with any later amendments of
5
this Act.
6
(2) Any information in column 3 of the table is not part of this Act.
7
Information may be inserted in this column, or information in it
8
may be edited, in any published version of this Act.
9
No. , 2017
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
3
3 Schedules
1
Legislation that is specified in a Schedule to this Act is amended or
2
repealed as set out in the applicable items in the Schedule
3
concerned, and any other item in a Schedule to this Act has effect
4
according to its terms.
5
Schedule 1 Non-ADI lender rules
4
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
No. , 2017
Schedule 1--Non-ADI lender rules
1
2
Banking Act 1959
3
1 Subsection 5(1)
4
Insert:
5
non-ADI lender has the meaning given by section 38B.
6
non-ADI lender rule means a rule under section 38C.
7
Part IIB provision of finance has the meaning given by
8
section 38B.
9
2 After Part IIA
10
Insert:
11
Part IIB--Provisions relating to the non-ADI
12
lenders
13
Division 1--Main concepts
14
38B Meaning of non-ADI lender and Part IIB provision of finance
15
(1) A non-ADI lender is a registrable corporation (within the meaning
16
of the Financial Sector (Collection of Data) Act 2001) that is
17
engaged in the Part IIB provision of finance.
18
(2) Part IIB provision of finance means the provision of finance
19
(within the meaning of the Financial Sector (Collection of Data)
20
Act 2001), other than:
21
(a) the activities mentioned in paragraphs 32(1)(e), (f), (g) and
22
(h) of that Act; and
23
(b) the provision of finance (within the meaning of that Act)
24
outside Australia; and
25
(c) the entry into an arrangement that is a derivative (within the
26
meaning of the Corporations Act 2001).
27
Non-ADI lender rules Schedule 1
No. , 2017
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
5
Division 2--Non-ADI lender rules
1
38C APRA may make non-ADI lender rules for non-ADI lenders
2
(1) Subsection (2) applies if:
3
(a) APRA considers that the Part IIB provision of finance by one
4
or more non-ADI lenders materially contributes to risks of
5
instability in the Australian financial system; and
6
(b) APRA considers that it is necessary, in order to address those
7
risks, to make rules under subsection (2).
8
(2) APRA may, in writing, determine rules for the purpose of
9
addressing those risks, to be complied with by:
10
(a) all non-ADI lenders; or
11
(b) a specified class of non-ADI lenders; or
12
(c) one or more specified non-ADI lenders.
13
(3) To avoid doubt, a rule cannot require a non-ADI lender to conduct
14
its business and activities in a particular way to the extent that the
15
business and activities are unrelated to the Part IIB provision of
16
finance.
17
(4) A rule may impose different requirements to be complied with in
18
different situations or in respect of different activities.
19
(5) Without limiting the matters in relation to which APRA may
20
determine a rule, a rule may require:
21
(a) each non-ADI lender; or
22
(b) each non-ADI lender included in a specified class of
23
non-ADI lenders; or
24
(c) a specified non-ADI lender; or
25
(d) each of 2 or more specified non-ADI lenders;
26
to ensure that its subsidiaries (or particular subsidiaries), or it and
27
its subsidiaries (or particular subsidiaries), collectively satisfy
28
particular requirements in relation to the risks mentioned in
29
subsection (1).
30
(6) A rule may provide for APRA to exercise powers and discretions
31
under the rule, including (but not limited to) discretions to approve,
32
impose, adjust or exclude specific requirements in relation to one
33
or more specified non-ADI lenders.
34
Schedule 1 Non-ADI lender rules
6
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
No. , 2017
(7) A rule may provide for a matter by applying, adopting or
1
incorporating, with or without modification, any matter contained
2
in an instrument or other writing as in force or existing from time
3
to time, despite:
4
(a) section 46AA of the Acts Interpretation Act 1901; and
5
(b) section 14 of the Legislation Act 2003.
6
(8) A rule referred to in paragraph (2)(c) has effect:
7
(a) from the day on which the rule is made; or
8
(b) if the rule specifies a later day--from that later day.
9
38D Non-ADI lender rules revoked after 2 years
10
(1) A non-ADI lender rule is revoked at the end of the period of 2
11
years beginning on the day the rule is made.
12
(2) If, at any time during that period, APRA considers that the
13
conditions in subsection 38C(1) still apply in relation to the
14
non-ADI lender rule, APRA may, by written instrument, extend (or
15
further extend) the period for a period of 2 years beginning on the
16
day the instrument is made.
17
Note:
An extension under this subsection does not affect the operation of
18
Part 4 of Chapter 3 (sunsetting) of the Legislation Act 2003.
19
38E Variation and revocation of non-ADI lender rules
20
(1) APRA may, in writing, vary or revoke a non-ADI lender rule.
21
(2) An instrument varying or revoking a non-ADI lender rule referred
22
to in paragraph 38C(2)(c) has effect:
23
(a) from the day on which the instrument is made; or
24
(b) if the instrument specifies a later day--from that later day.
25
38F Notification and consultation regarding non-ADI lender rules
26
Notification
27
(1) If APRA makes or varies a non-ADI lender rule referred to in
28
paragraph 38C(2)(c) it must, as soon as practicable, give a copy of
29
the rule, or of the variation, to the non-ADI lender, or to each
30
non-ADI lender, to which the rule applies.
31
Non-ADI lender rules Schedule 1
No. , 2017
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
7
(2) If APRA revokes a non-ADI lender rule referred to in
1
paragraph 38C(2)(c) it must, as soon as practicable, give notice of
2
the revocation to the non-ADI lender, or to each non-ADI lender,
3
to which the rule applied.
4
(3) If APRA extends the period mentioned in subsection 38D(1) in
5
relation to a non-ADI lender rule referred to in
6
paragraph 38C(2)(c) it must, as soon as practicable, give notice of
7
the extension to the non-ADI lender, or to each non-ADI lender, to
8
which the rule applies.
9
Consultation
10
(4) Before making a non-ADI lender rule, or varying or revoking a
11
non-ADI lender rule, APRA must consult with ASIC.
12
(5) A failure to comply with subsection (4) does not affect the validity
13
of the action concerned.
14
38G Which non-ADI lender rules, etc., are legislative instruments
15
(1) The following instruments are not legislative instruments:
16
(a) a non-ADI lender rule referred to in paragraph 38C(2)(c);
17
(b) an instrument under section 38E varying or revoking a
18
non-ADI lender rule referred to in paragraph 38C(2)(c);
19
(c) an instrument under subsection 38D(2) extending the period
20
mentioned in subsection 38D(1) in relation to a non-ADI
21
lender rule referred to in paragraph 38C(2)(c).
22
(2) Otherwise, an instrument made under section 38C, 38D or 38E is a
23
legislative instrument.
24
38H Review of decisions relating to non-ADI lender rules
25
Part VI applies to the following decisions:
26
(a) a decision to make a non-ADI lender rule referred to in
27
paragraph 38C(2)(c);
28
(b) a decision to vary such a rule;
29
(c) a decision to make an instrument under subsection 38D(2) in
30
relation to such a rule.
31
Schedule 1 Non-ADI lender rules
8
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
No. , 2017
38J Division not to limit operation of other provisions
1
Nothing in this Division is intended to limit the operation of any
2
other provision of this Act or of the Reserve Bank Act 1959.
3
Division 3--APRA's power to issue directions
4
38K APRA may give directions in certain circumstances
5
(1) APRA may give a body corporate that is a non-ADI lender a
6
direction to take specified action to comply with the whole or a
7
part of a non-ADI lender rule if APRA has reason to believe that:
8
(a) the body corporate has contravened the non-ADI lender rule;
9
or
10
(b) the body corporate is likely to contravene the non-ADI lender
11
rule.
12
(2) The direction must:
13
(a) be given by notice in writing to the body corporate; and
14
(b) specify the ground referred to in subsection (1) as a result of
15
which the direction is given.
16
(3) In deciding whether to give a direction under subsection (1),
17
APRA must consider whether the body corporate has taken
18
reasonable steps in the past to comply with the non-ADI lender
19
rule.
20
(4) The direction may deal with the time by which, or period during
21
which, it is to be complied with.
22
(5) The body corporate has power to comply with the direction despite
23
anything in its constitution or any contract or arrangement to which
24
it is a party.
25
(6) APRA may, by notice in writing to the body corporate, vary the
26
direction if, at the time of the variation, it considers that the
27
variation is necessary and appropriate.
28
(7) The direction has effect until APRA revokes it by notice in writing
29
to the body corporate. APRA may revoke the direction if, at the
30
time of revocation, it considers that the direction is no longer
31
necessary or appropriate.
32
Non-ADI lender rules Schedule 1
No. , 2017
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
9
(8) Part VI applies to a decision to give a direction under
1
subsection (1).
2
38L Non-compliance with a direction under section 38K
3
(1) A non-ADI lender commits an offence if:
4
(a) it does, or fails to do, an act; and
5
(b) doing, or failing to do, the act results in a contravention of a
6
direction given to it under section 38K.
7
Penalty: 50 penalty units.
8
Note:
If a body corporate is convicted of an offence against this subsection,
9
subsection 4B(3) of the Crimes Act 1914 allows a court to impose a
10
fine of up to 5 times the penalty stated above.
11
(2) If a non-ADI lender does or fails to do an act in circumstances that
12
give rise to the non-ADI lender committing an offence against
13
subsection (1), the non-ADI lender commits an offence against that
14
subsection in respect of:
15
(a) the first day on which the offence is committed; and
16
(b) each subsequent day (if any) on which the circumstances that
17
gave rise to the non-ADI lender committing the offence
18
continue (including the day of conviction for any such
19
offence or any later day).
20
Note:
This subsection is not intended to imply that section 4K of the Crimes
21
Act 1914 does not apply to offences against this Act or the regulations.
22
(3) An officer of a non-ADI lender commits an offence if:
23
(a) the officer fails to take reasonable steps to ensure that the
24
non-ADI lender complies with a direction given to it under
25
section 38K; and
26
(b) the officer's duties include ensuring that the non-ADI lender
27
complies with the direction, or with a class of directions that
28
includes the direction.
29
Penalty: 50 penalty units.
30
Note:
If a body corporate is convicted of an offence against this subsection,
31
subsection 4B(3) of the Crimes Act 1914 allows a court to impose a
32
fine of up to 5 times the penalty stated above.
33
(4) If an officer of a non-ADI lender fails to take reasonable steps to
34
ensure that the non-ADI lender complies with a direction given to
35
Schedule 1 Non-ADI lender rules
10
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
No. , 2017
it under section 38K in circumstances that give rise to the officer
1
committing an offence against subsection (3), the officer commits
2
an offence against that subsection in respect of:
3
(a) the first day on which the offence is committed; and
4
(b) each subsequent day (if any) on which the circumstances that
5
gave rise to the officer committing the offence continue
6
(including the day of conviction for any such offence or any
7
later day).
8
Note:
This subsection is not intended to imply that section 4K of the Crimes
9
Act 1914 does not apply to offences against this Act or the regulations.
10
(5) In this section, officer has the meaning given by section 9 of the
11
Corporations Act 2001.
12
3 Subparagraph 65A(1)(a)(i)
13
Repeal the subparagraph, substitute:
14
(i) a provision of this Act, the regulations, the prudential
15
standards or the non-ADI lender rules; or
16
4 Paragraph 65A(4)(a)
17
Repeal the paragraph, substitute:
18
(a) by a provision of this Act, the regulations, the prudential
19
standards or the non-ADI lender rules to do; or
20
Registrable corporations Schedule 2
No. , 2017
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
11
Schedule 2--Registrable corporations
1
2
Financial Sector (Collection of Data) Act 2001
3
1 Subsection 7(1)
4
After "so formed and", insert "any of the following requirements are
5
satisfied".
6
2 Paragraphs 7(1)(a), (b) and (c)
7
Repeal the paragraphs, substitute:
8
(a) the corporation engages in the provision of finance in the
9
course of carrying on business in Australia;
10
(b) the corporation is specified in a determination under
11
subsection (1A), or is in a class of corporations specified in a
12
determination under subsection (1A).
13
3 After subsection 7(1)
14
Insert:
15
(1A) For the purposes of paragraph (1)(b), APRA may:
16
(a) make a determination in writing specifying a particular
17
corporation or corporations;
18
(b) make a determination in writing specifying a class of
19
corporations or classes of corporations.
20
(1B) A determination made under paragraph (1A)(a) is not a legislative
21
instrument.
22
(1C) A determination made under paragraph (1A)(b) is a legislative
23
instrument.
24
(1D) Before making a determination under paragraph (1A)(a) or (b),
25
APRA must consider:
26
(a) in the case of a determination under paragraph (1A)(a)--
27
whether the corporation or each of the corporations specified
28
in the determination has business activities in Australia that
29
include the provision of finance; or
30
(b) in the case of a determination under paragraph (1A)(b)--
31
whether each corporation in the class of corporations or
32
Schedule 2 Registrable corporations
12
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
No. , 2017
classes of corporations specified in the determination has
1
business activities in Australia that include the provision of
2
finance.
3
(1E) A failure to comply with subsection (1D) does not affect the
4
validity of the determination.
5
(1F) As soon as practicable after making a determination under
6
paragraph (1A)(a), APRA must give a copy of the determination to
7
each corporation specified in the determination.
8
(1G) A failure to comply with subsection (1F) does not affect the
9
validity of the determination.
10
4 Paragraph 7(2)(h)
11
Repeal the paragraph.
12
5 Paragraph 7(2)(i)
13
Repeal the paragraph, substitute:
14
(i) the corporation is covered under subsection (2A); or
15
(ia) the corporation is specified in a determination under
16
subsection (2F), or is in a class of corporations specified in a
17
determination under subsection (2F); or
18
6 After subsection 7(2)
19
Insert:
20
(2A) For the purposes of paragraph (2)(i), a corporation is covered under
21
this subsection if:
22
(a) the sum of the values of the corporation's assets in Australia
23
that consist of debts due to the corporation resulting from
24
transactions entered into in the course of the provision of
25
finance by the corporation does not exceed:
26
(i) $50,000,000; or
27
(ii) if a greater or lesser amount is prescribed by the
28
regulations--the amount so prescribed; and
29
(b) the sum of the values of the principal amounts outstanding on
30
loans or other financing covered by subsection (2C) does not
31
exceed:
32
(i) $50,000,000; or
33
Registrable corporations Schedule 2
No. , 2017
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
13
(ii) if a greater or lesser amount is prescribed by the
1
regulations--the amount so prescribed.
2
(2B) For the purposes of paragraph (2A)(b), determine the value of the
3
principal amount outstanding on a loan or other financing at the
4
time the loan or other financing arose.
5
(2C) For the purposes of paragraph (2A)(b), a loan or other financing is
6
covered by this subsection if:
7
(a) the loan or other financing arose in the relevant financial year
8
mentioned in subsection (2D); and
9
(b) the funding or originating of the loan or other financing
10
resulted from the carrying out, whether directly or indirectly,
11
of activities by the corporation.
12
(2D) In determining whether the corporation is a registrable corporation
13
at a time, for the purposes of paragraph (2C)(a), the relevant
14
financial year is the most recent financial year ending before that
15
time.
16
(2E) For the purposes of working out whether a corporation (the test
17
corporation) is covered under subsection (2A):
18
(a) identify each other corporation (if any) that is related to the
19
test corporation (disregarding subsections 34(2) and (3)); and
20
(b) treat those other corporations as not being a separate entity,
21
but rather as being a part of the test corporation.
22
(2F) For the purposes of paragraph (2)(ia), APRA may:
23
(a) make a determination in writing specifying a particular
24
corporation or corporations;
25
(b) make a determination in writing specifying a class of
26
corporations or classes of corporations.
27
(2G) A determination made under paragraph (2F)(a) is not a legislative
28
instrument.
29
(2H) A determination made under paragraph (2F)(b) is a legislative
30
instrument.
31
(2J) As soon as practicable after making a determination under
32
paragraph (2F)(a), APRA must give a copy of the determination to
33
each corporation specified in the determination.
34
Schedule 2 Registrable corporations
14
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
No. , 2017
(2K) A failure to comply with subsection (2J) does not affect the
1
validity of the determination.
2
7 Subsection 7(3)
3
Repeal the subsection.
4
8 Section 31 (after paragraph (a) of the definition of
5
reviewable decision)
6
Insert:
7
(aa) a decision to make a determination under
8
paragraph 7(1A)(a);
9
(ab) a decision not to make a determination under
10
paragraph 7(2F)(a);
11
9 After paragraph 32(1)(a)
12
Insert:
13
(aa) the carrying out of activities, whether directly or indirectly,
14
that result in the funding or originating of loans or other
15
financing;
16
10 After subsection 32(1)
17
Insert:
18
(1A) A reference in this Act to the provision of finance does not include
19
a reference to the following:
20
(a) the provision of financial advice;
21
(b) intra-group financing activity between corporations that are
22
related to one another.
23
Restricted words Schedule 3
No. , 2017
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
15
Schedule 3--Restricted words
1
2
Banking Act 1959
3
1 Subsection 9(3) (note 1)
4
Repeal the note.
5
2 Subsection 9(3) (note 2)
6
Omit "Note 2", substitute "Note".
7
3 Subsection 66(1AC)
8
Repeal the subsection, substitute:
9
(1AC) It is not an offence against subsection (1) for an ADI to assume or
10
use the words bank, banker or banking in relation to the ADI's
11
financial business.
12
Note:
See also section 66AA, which deals with the use of the word bank by
13
ADIs.
14
4 Subsection 66(2C)
15
Repeal the subsection.
16
5 After section 66
17
Insert:
18
66AA Use of the word bank by ADIs
19
(1) A person commits an offence if:
20
(a) the person is an ADI; and
21
(b) the ADI carries on a financial business, whether or not in
22
Australia; and
23
(c) the person assumes or uses, in Australia, the word bank in
24
relation to that financial business; and
25
(d) a determination under subsection (3) is in force that specifies
26
that this section applies to the ADI.
27
Penalty: 50 penalty units.
28
Schedule 3 Restricted words
16
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
No. , 2017
Note 1:
For the meanings of assume or use and financial business, see
1
subsection (10).
2
Note 2:
Chapter 2 of the Criminal Code sets out the general principles of
3
criminal responsibility.
4
Note 3:
If a body corporate is convicted of an offence against this subsection,
5
subsection 4B(3) of the Crimes Act 1914 allows a court to impose a
6
fine of up to 5 times the penalty stated above.
7
(2) If a person assumes or uses the word bank in circumstances that
8
give rise to the person committing an offence against
9
subsection (1), the person commits an offence against that
10
subsection in respect of:
11
(a) the first day on which the offence is committed; and
12
(b) each subsequent day (if any) on which the circumstances that
13
gave rise to the person committing the offence continue
14
(including the day of conviction for any such offence or any
15
later day).
16
Note:
This subsection is not intended to imply that section 4K of the Crimes
17
Act 1914 does not apply to offences against this Act or the regulations.
18
(3) APRA may, in writing, determine that this section applies to an
19
ADI while the determination is in force.
20
(4) A determination under subsection (3):
21
(a) may be expressed to apply:
22
(i) to a particular ADI; or
23
(ii) to a class, or classes, of ADIs; and
24
(b) may specify the period during which the determination is in
25
force.
26
A period specified under paragraph (b) must not begin before the
27
day on which the determination is made.
28
(5) If APRA makes a determination under subsection (3) that applies
29
to a particular ADI, APRA must also give the ADI written notice
30
of the determination.
31
(6) APRA may, in writing, vary or revoke a determination made under
32
subsection (3).
33
(7) The following instruments are not legislative instruments:
34
(a) a determination under subsection (3) that applies to a
35
particular ADI;
36
Restricted words Schedule 3
No. , 2017
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
17
(b) an instrument made under subsection (6) varying or revoking
1
a determination that applies to a particular ADI.
2
(8) Otherwise, a determination under subsection (3) or an instrument
3
under subsection (6) is a legislative instrument.
4
(9) Part VI applies to the following decisions under this section:
5
(a) a decision to determine that this section applies to a particular
6
ADI;
7
(b) a decision to vary a determination that applies to a particular
8
ADI.
9
(10) In this section:
10
(a) a reference to the word bank being assumed or used includes
11
a reference to the word being assumed or used:
12
(i) as part of another word or expression; or
13
(ii) in combination with other words, letters or other
14
symbols; and
15
(b) a reference to a financial business is a reference to a business
16
that:
17
(i) consists of, or includes, the provision of financial
18
services; or
19
(ii) relates, in whole or in part, to the provision of financial
20
services.
21
Schedule 4 Objects provisions
18
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
No. , 2017
Schedule 4--Objects provisions
1
2
Banking Act 1959
3
1 After section 2
4
Insert:
5
2A Main objects of this Act
6
(1) The main objects of this Act are:
7
(a) to protect the interests of depositors in ADIs in ways that are
8
consistent with the continued development of a viable,
9
competitive and innovative banking industry; and
10
(b) to promote financial system stability in Australia.
11
(2) This Act, and the prudential standards and non-ADI lender rules
12
determined by APRA under this Act, achieve this mainly by:
13
(a) restricting who can carry on banking business in Australia;
14
and
15
(b) providing for the prudential supervision of ADIs by APRA,
16
by APRA determining prudential standards or taking other
17
action to ensure prudent management of ADIs; and
18
(c) providing for APRA to manage or respond to circumstances
19
in which the ability of an ADI to meet its obligations may be
20
threatened; and
21
(d) providing for certain account-holders to be paid amounts
22
where the financial claims scheme has been declared to apply
23
in relation to an ADI; and
24
(f) for the purposes of paragraph (1)(b)--providing rules in
25
relation to the provision of certain kinds of finance by
26
non-ADI lenders.
27
(3) It is intended that APRA, in taking actions to address risks to
28
financial system stability in Australia, may consider specific
29
sources of systemic risks, whether geographic, sectoral or
30
otherwise.
31
(4) This section does not apply to the following:
32
Objects provisions Schedule 4
No. , 2017
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
19
(a) Divisions 4 (Mobilization of foreign currency) and 5
1
(Advances) of Part II;
2
(b) Parts III (Foreign exchange, foreign investment etc.), IV
3
(Gold) and V (Interest rates);
4
(c) any other provision of this Act, to the extent that it relates to
5
any of the provisions mentioned in paragraph (a) or (b).
6
Insurance Act 1973
7
2 Section 2A (heading)
8
Repeal the heading, substitute:
9
2A Main objects of this Act
10
3 Subsection 2A(1)
11
Repeal the subsection, substitute:
12
(1) The main objects of this Act are:
13
(a) to protect the interests of policyholders and prospective
14
policyholders under insurance policies (issued by general
15
insurers and Lloyd's underwriters) in ways that are consistent
16
with the continued development of a viable, competitive and
17
innovative insurance industry; and
18
(b) to promote financial system stability in Australia.
19
4 Paragraphs 2A(2)(e) and (f)
20
Repeal the paragraphs, substitute:
21
(e) providing for APRA to manage or respond to circumstances
22
in which the ability of a general insurer to meet its
23
obligations may be threatened; and
24
(f) providing for certain policyholders to be paid amounts where
25
the financial claims scheme has been declared to apply in
26
relation to a general insurer.
27
Life Insurance Act 1995
28
5 Subsection 3(1)
29
Repeal the subsection, substitute:
30
Schedule 4 Objects provisions
20
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
No. , 2017
(1) The main objects of this Act are:
1
(a) to protect the interests of the owners and prospective owners
2
of life insurance policies in a manner consistent with the
3
continued development of a viable, competitive and
4
innovative life insurance industry; and
5
(b) to promote financial system stability in Australia.
6
6 Paragraph 3(2)(d)
7
Repeal the paragraph, substitute:
8
(d) providing for APRA to manage or respond to circumstances
9
in which the ability of a life company to meet its obligations
10
may be threatened;
11
Credit card reforms Schedule 5
When a credit card contract, or a credit limit increase, is unsuitable Part 1
No. , 2017
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
21
Schedule 5--Credit card reforms
1
Part 1--When a credit card contract, or a credit limit
2
increase, is unsuitable
3
National Consumer Credit Protection Act 2009
4
1 After subsection 118(3)
5
Insert:
6
(3AA) For the purposes of paragraph (2)(a), a consumer is taken to be
7
able to comply with the consumer's financial obligations under a
8
contract only with substantial hardship if:
9
(a) the contract is a credit card contract; and
10
(b) the consumer could not comply with an obligation to repay
11
an amount equal to the credit limit of the contract within the
12
period determined by ASIC under section 160F.
13
2 After subsection 119(3)
14
Insert:
15
(3A) For the purposes of paragraph (2)(a), a consumer is taken to be
16
able to comply with the consumer's financial obligations under a
17
contract only with substantial hardship if:
18
(a) the contract is a credit card contract; and
19
(b) the consumer could not comply with an obligation to repay
20
an amount equal to the credit limit of the contract within the
21
period determined by ASIC under section 160F.
22
3 After subsection 123(3)
23
Insert:
24
(3AA) For the purposes of paragraph (2)(a), a consumer is taken to be
25
able to comply with the consumer's financial obligations under a
26
contract only with substantial hardship if:
27
(a) the contract is a credit card contract; and
28
(b) the consumer could not comply with an obligation to repay
29
an amount equal to the credit limit of the contract within the
30
period determined by ASIC under section 160F.
31
Schedule 5 Credit card reforms
Part 1 When a credit card contract, or a credit limit increase, is unsuitable
22
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
No. , 2017
4 After subsection 124(3)
1
Insert:
2
(3A) For the purposes of paragraph (2)(a), a consumer is taken to be
3
able to comply with the consumer's financial obligations under a
4
contract only with substantial hardship if:
5
(a) the contract is a credit card contract; and
6
(b) the consumer could not comply with an obligation to repay
7
an amount equal to the credit limit of the contract within the
8
period determined by ASIC under section 160F.
9
5 After subsection 131(3)
10
Insert:
11
(3AA) For the purposes of paragraph (2)(a), a consumer is taken to be
12
able to comply with the consumer's financial obligations under a
13
contract only with substantial hardship if:
14
(a) the contract is a credit card contract; and
15
(b) the consumer could not comply with an obligation to repay
16
an amount equal to the credit limit of the contract within the
17
period determined by ASIC under section 160F.
18
6 After subsection 133(3)
19
Insert:
20
(3AA) For the purposes of paragraph (2)(a), a consumer is taken to be
21
able to comply with the consumer's financial obligations under a
22
contract only with substantial hardship if:
23
(a) the contract is a credit card contract; and
24
(b) the consumer could not comply with an obligation to repay
25
an amount equal to the credit limit of the contract within the
26
period determined by ASIC under section 160F.
27
7 At the end of section 160A
28
Add:
29
Division 5 provides that ASIC may determine periods for the
30
purpose of determining the unsuitability of credit card contracts.
31
Credit card reforms Schedule 5
When a credit card contract, or a credit limit increase, is unsuitable Part 1
No. , 2017
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
23
8 At the end of Part 3-6A
1
Add:
2
Division 5--Periods for determining unsuitability in
3
respect of credit card contracts
4
160F Periods for determining unsuitability in respect of credit card
5
contracts
6
(1) ASIC may, by legislative instrument, determine a period for the
7
purposes of the following provisions:
8
(a) paragraph 118(3AA)(b);
9
(b) paragraph 119(3A)(b);
10
(c) paragraph 123(3AA)(b);
11
(d) paragraph 124(3A)(b);
12
(e) paragraph 131(3AA)(b);
13
(f) paragraph 133(3AA)(b).
14
(2) Without limiting subsection (1), a legislative instrument referred to
15
in that subsection may determine different periods in relation to the
16
following:
17
(a) different classes of credit card contracts;
18
(b) different credit limits;
19
(c) different rates of interest.
20
Schedule 5 Credit card reforms
Part 2 Credit limits
24
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
No. , 2017
Part 2--Credit limits
1
Division 1
--Credit limit increases
2
National Consumer Credit Protection Act 2009
3
9 Subsection 133BE(1) (note 1)
4
Repeal the note.
5
10 Subsection 133BE(1) (note 2)
6
Omit "Note 2", substitute "Note".
7
11 Subsections 133BE(2) and (3) (note)
8
Repeal the note.
9
12 Paragraph 133BE(5)(a)
10
Omit "a written communication", substitute "any form of
11
communication".
12
13 Subsection 133BE(6)
13
Omit "written".
14
14 Sections 133BF and 133BG
15
Repeal the sections.
16
Division 2
--Credit limit reductions
17
National Consumer Credit Protection Act 2009
18
15 Subsection 5(1)
19
Insert:
20
credit limit reduction entitlement: see subsection 133BF(3).
21
16 Section 133B (paragraph relating to Division 4)
22
Repeal the paragraph, substitute:
23
Credit card reforms Schedule 5
Credit limits Part 2
No. , 2017
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
25
Division 4 imposes restrictions on a licensee making offers etc. to
1
increase the credit limit of a credit card contract, and imposes
2
requirements aimed at ensuring the consumer can reduce the credit
3
limit of a credit card contract.
4
17 Division 4 of Part 3-2B (heading)
5
Repeal the heading, substitute:
6
Division 4--Offers etc. to increase, and entitlement to
7
reduce, credit limit of credit card contract
8
18 At the end of Division 4 of Part 3-2B
9
Add:
10
133BF Credit provider not to enter into credit card contract unless
11
it allows credit limit to be reduced
12
Requirement
13
(1) A licensee must not enter into, or offer to enter into, a credit card
14
contract under which the licensee would be the credit provider, if
15
the consumer who would be the debtor under the contract would
16
not have a credit limit reduction entitlement under the contract.
17
Civil penalty:
2,000 penalty units.
18
Offence
19
(2) A person commits an offence if:
20
(a) the person is subject to a requirement under subsection (1);
21
and
22
(b) the person engages in conduct; and
23
(c) the conduct contravenes the requirement.
24
Criminal penalty:
50 penalty units.
25
Meaning of credit limit reduction entitlement
26
(3) A consumer who is the debtor under a credit card contract has a
27
credit limit reduction entitlement under the contract if:
28
Schedule 5 Credit card reforms
Part 2 Credit limits
26
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
No. , 2017
(a) for a contract that does not provide for a minimum credit
1
limit--the consumer is entitled under the contract to reduce
2
the credit limit of the contract to any amount (including nil);
3
or
4
(b) for a contract that provides for a minimum credit limit--the
5
consumer is entitled under the contract to reduce the credit
6
limit of the contract to any amount that equals, or exceeds,
7
the minimum credit limit.
8
133BFA Credit provider to provide online capacity to request
9
reduction of credit limit
10
When this section applies
11
(1) This section applies if a consumer who is the debtor under a credit
12
card contract has a credit limit reduction entitlement under the
13
contract on a day (the online reduction day).
14
Requirement
15
(2) The licensee who is the credit provider under the credit card
16
contract must establish and maintain a website that satisfies all of
17
the following paragraphs:
18
(a) the website tells the consumer that the consumer may use the
19
website to request a reduction in the consumer's credit limit;
20
(b) the website:
21
(i) tells the consumer what information the consumer will
22
need to enter in order to request a reduction in the
23
consumer's credit limit; and
24
(ii) provides the consumer with instructions on how to
25
request a reduction in the consumer's credit limit;
26
(c) if the consumer enters the information and follows those
27
instructions, the consumer can use the website to request a
28
reduction in the consumer's credit limit;
29
(d) the website is available on the online reduction day.
30
Civil penalty:
2,000 penalty units.
31
Credit card reforms Schedule 5
Credit limits Part 2
No. , 2017
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
27
Defence
1
(3) For the purposes of subsection (2), it is a defence if the website is
2
reasonably unavailable on the online reduction day.
3
133BFB Credit provider not to suggest the consumer not reduce the
4
credit limit
5
When this section applies
6
(1) This section applies if:
7
(a) a consumer who is the debtor under a credit card contract has
8
a credit limit reduction entitlement under the contract; and
9
(b) the consumer has requested to exercise the entitlement by
10
reducing the credit limit of the contract.
11
Requirement
12
(2) The licensee who is the credit provider under the credit card
13
contract must not do any of the following:
14
(a) suggest that the consumer apply for an increase to the credit
15
limit of the contract;
16
(b) suggest that the consumer not reduce the credit limit of the
17
contract;
18
(c) if the consumer's request is to reduce the credit limit of the
19
contract by a specified amount--suggest that the consumer
20
instead reduce the credit limit by a smaller amount.
21
Civil penalty:
2,000 penalty units.
22
Offence
23
(3) A person commits an offence if:
24
(a) the person is subject to a requirement under subsection (2);
25
and
26
(b) the person engages in conduct; and
27
(c) the conduct contravenes the requirement.
28
Criminal penalty:
50 penalty units.
29
Schedule 5 Credit card reforms
Part 2 Credit limits
28
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
No. , 2017
133BFC Credit provider to give effect to request to reduce credit
1
limit
2
When this section applies
3
(1) This section applies if:
4
(a) a consumer who is the debtor under a credit card contract has
5
a credit limit reduction entitlement under the contract; and
6
(b) the consumer has requested to exercise the entitlement by
7
reducing the credit limit of the contract.
8
Requirement
9
(2) The licensee who is the credit provider under the credit card
10
contract must take reasonable steps to ensure that the request is
11
given effect to as soon as practicable.
12
Civil penalty:
2,000 penalty units.
13
Offence
14
(3) A person commits an offence if:
15
(a) the person is subject to a requirement under subsection (2);
16
and
17
(b) the person engages in conduct; and
18
(c) the conduct contravenes the requirement.
19
Criminal penalty:
50 penalty units.
20
Credit card reforms Schedule 5
Interest charges Part 3
No. , 2017
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
29
Part 3--Interest charges
1
National Consumer Credit Protection Act 2009
2
19 Section 133B (after the paragraph relating to Division 6)
3
Insert:
4
Division 7 imposes requirements relating to application of interest
5
charges under credit card contracts.
6
20 At the end of Part 3-2B
7
Add:
8
Division 7--Calculation of interest under credit card
9
contracts
10
133BS Credit provider not to impose retrospective interest charges
11
Requirement
12
(1) A licensee who is the credit card provider under a credit card
13
contract must not, in relation to a statement period covered by a
14
statement of account, impose on the consumer who is the debtor
15
under the contract a liability to pay a rate of interest if the rate of
16
interest would:
17
(a) be applied to the balance, or a part of the balance, of the
18
credit card contract on a day in the statement period; and
19
(b) be applied because of facts or circumstances coming into
20
existence after that day; and
21
(c) be higher than the rate of interest (including nil) that would
22
have been applied to that balance, or that part of the balance,
23
on that day if those facts and circumstances had not come
24
into existence.
25
Civil penalty:
2,000 penalty units.
26
Schedule 5 Credit card reforms
Part 3 Interest charges
30
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
No. , 2017
Offence
1
(2) A person commits an offence if:
2
(a) the person is subject to a requirement under subsection (1);
3
and
4
(b) the person engages in conduct; and
5
(c) the conduct contravenes the requirement.
6
Criminal penalty:
50 penalty units.
7
Credit card reforms Schedule 5
Ending credit card contracts Part 4
No. , 2017
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
31
Part 4--Ending credit card contracts
1
National Consumer Credit Protection Act 2009
2
21 Subsection 5(1)
3
Insert:
4
credit card termination entitlement: see subsection 133BT(3).
5
22 At the end of section 133B
6
Add:
7
Division 8 imposes requirements aimed at ensuring the consumer
8
can terminate a credit card contract.
9
23 Before Part 3-2C
10
Insert:
11
Division 8--Ending credit card contracts
12
133BT Credit provider not to enter into credit card contract unless
13
it allows for termination of contracts
14
Requirement
15
(1) A licensee must not enter into, or offer to enter into, a credit card
16
contract under which the licensee would be the credit provider, if
17
the consumer who would be the debtor under the contract would
18
not have a credit card termination entitlement under the contract.
19
Civil penalty:
2,000 penalty units.
20
Offence
21
(2) A person commits an offence if:
22
(a) the person is subject to a requirement under subsection (1);
23
and
24
(b) the person engages in conduct; and
25
Schedule 5 Credit card reforms
Part 4 Ending credit card contracts
32
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
No. , 2017
(c) the conduct contravenes the requirement.
1
Criminal penalty:
50 penalty units.
2
Meaning of credit card termination entitlement
3
(3) A consumer who is the debtor under a credit card contract has a
4
credit card termination entitlement under the contract if the
5
consumer is entitled, under the contract, to terminate the credit card
6
contract.
7
133BU Credit provider to provide online capacity to request
8
termination of credit card contract
9
When this section applies
10
(1) This section applies if a consumer who is the debtor under a credit
11
card contract has a credit card termination entitlement under the
12
contract on a day (the online termination day).
13
Requirement
14
(2) The licensee who is the credit provider under the credit card
15
contract must establish and maintain a website that satisfies all of
16
the following paragraphs:
17
(a) the website tells the consumer that the consumer may use the
18
website to request to terminate the credit card contract;
19
(b) the website:
20
(i) tells the consumer what information the consumer will
21
need to enter in order to request to terminate the credit
22
card contract; and
23
(ii) provides the consumer with instructions on how to
24
request to terminate the credit card contract;
25
(c) if the consumer enters the information and follows those
26
instructions, the consumer can use the website to request to
27
terminate the credit card contract;
28
(d) the website is available on the online termination day.
29
Civil penalty:
2,000 penalty units.
30
Credit card reforms Schedule 5
Ending credit card contracts Part 4
No. , 2017
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
33
Defence
1
(3) For the purposes of subsection (2), it is a defence if the website is
2
reasonably unavailable on the online termination day.
3
133BV Credit provider not to suggest the consumer not terminate
4
the credit card contract
5
When this section applies
6
(1) This section applies if:
7
(a) a consumer who is the debtor under a credit card contract has
8
a credit card termination entitlement under the contract; and
9
(b) the consumer has requested to terminate the credit card
10
contract.
11
Requirement
12
(2) The licensee who is the credit provider under the credit card
13
contract must not suggest that the consumer remain in the credit
14
card contract.
15
Civil penalty:
2,000 penalty units.
16
Offence
17
(3) A person commits an offence if:
18
(a) the person is subject to a requirement under subsection (2);
19
and
20
(b) the person engages in conduct; and
21
(c) the conduct contravenes the requirement.
22
Criminal penalty:
50 penalty units.
23
133BW Credit provider to give effect to request to terminate credit
24
card contract
25
When this section applies
26
(1) This section applies if:
27
(a) a consumer who is the debtor under a credit card contract has
28
a credit card termination entitlement under the contract; and
29
Schedule 5 Credit card reforms
Part 4 Ending credit card contracts
34
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
No. , 2017
(b) the consumer has requested to terminate the consumer's
1
credit card contract.
2
Requirement
3
(2) The licensee who is the credit provider under the credit card
4
contract must take reasonable steps to ensure that the request is
5
given effect to as soon as practicable.
6
Civil penalty:
2,000 penalty units.
7
Offence
8
(3) A person commits an offence if:
9
(a) the person is subject to a requirement under subsection (2);
10
and
11
(b) the person engages in conduct; and
12
(c) the conduct contravenes the requirement.
13
Criminal penalty:
50 penalty units.
14
Credit card reforms Schedule 5
Application provisions Part 5
No. , 2017
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
35
Part 5--Application provisions
1
National Consumer Credit Protection (Transitional and
2
Consequential Provisions) Act 2009
3
24 In the appropriate position
4
Insert:
5
Schedule 6--Application provisions for the
6
Treasury Laws Amendment (Banking
7
Measures No. 1) Act 2017
8
Part 1--Definitions
9
1 Definitions
10
In this Schedule:
11
amending Act means the Treasury Laws Amendment (Banking
12
Measures No. 1) Act 2017.
13
Part 2--Credit limits
14
2 Application of amendments relating to credit limit increase
15
invitations
16
(1)
The amendments of sections 133BE, 133BF and 133BG made by
17
Division 1 of Part 2 of Schedule 5 to the amending Act apply in relation
18
to communications given on or after the commencement of that
19
Division in relation to credit card contracts entered into on or after that
20
commencement.
21
(2)
The amendments also apply in relation to credit card contracts entered
22
into before the commencement of that Division.
23
25 At the end of Part 2 of Schedule 6
24
Add:
25
3 Application of sections 133BF, 133BFA, 133BFB and
26
133BFC of the National Credit Act
27
Schedule 5 Credit card reforms
Part 5 Application provisions
36
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
No. , 2017
(1)
Sections 133BF, 133BFA, 133BFB and 133BFC of the National Credit
1
Act, as inserted by Division 2 of Part 2 of Schedule 5 to the amending
2
Act, apply to credit card contracts entered into on or after the
3
commencement of that Division.
4
(2)
The sections, apart from subsections 133BF(1) and (2), also apply to
5
credit card contracts entered into before the commencement of that
6
Division.
7
Part 3--When a credit card contract, or a credit limit
8
increase, is unsuitable
9
4 Application of provisions about unsuitability of credit card
10
contracts or increases in the credit limit of a credit card
11
contract
12
The amendments of sections 118, 119, 123, 124, 131 and 133 of the
13
National Credit Act made by Part 1 of Schedule 5 to the amending Act
14
apply:
15
(a) so far as the sections apply in relation to entering a credit
16
card contract--to credit card contracts entered into on or after
17
the commencement of that Part; and
18
(b) so far as the sections apply in relation to remaining in a credit
19
card contract, or increasing the credit limit of a credit card
20
contract:
21
(i) to credit card contracts entered into on or after the
22
commencement of that Part; and
23
(ii) to credit card contracts entered into before the
24
commencement of that Part.
25
Part 4--Interest charges
26
5 Application of Division 7 of Part 3-2B of the National Credit
27
Act
28
(1)
Division 7 of Part 3-2B of the National Credit Act, as inserted by Part 3
29
of Schedule 5 to the amending Act, applies to credit card contracts
30
entered into on or after the commencement of Part 3 of that Schedule.
31
(2)
The Division also applies to credit card contracts entered into before the
32
commencement of Part 3 of that Schedule.
33
Credit card reforms Schedule 5
Application provisions Part 5
No. , 2017
Treasury Laws Amendment (Banking Measures No. 1) Bill 2017
37
(3)
However, the Division does not apply in relation to use of a credit card
1
before the commencement of Part 3 of that Schedule.
2
Part 5--Ending credit card contracts
3
6 Application of Division 8 of Part 3-2B of the National Credit
4
Act
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(1)
Division 8 of Part 3-2B of the National Credit Act, as inserted by Part 4
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of Schedule 5 to the amending Act, applies to credit card contracts
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entered into on or after the commencement of Part 4 of that Schedule.
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(2)
Division 8 of Part 3-2B of the National Credit Act, apart from
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subsections 133BT(1) and (2), inserted by Part 4 of Schedule 5 to the
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amending Act, also applies to credit card contracts entered into before
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the commencement of Part 4 of that Schedule.
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